How to Create Efficiencies in Fund Reporting
Fund Fact Documents Require Data Expertise
The ability to respond to the myriad rules and variations requires data expertise and agility.
The biggest challenge to producing error-free Fund Fact documents in a timely manner resolves to data expertise-- the ability to make changes to data quickly, to have a system that can pick up those changes and automatically adjust the document output and the ability to override those rules when there are exceptions. Having worked on Fund Fact documents for more than a decade now, we understand the challenges that they present. The rules are prescribed by the regulators, but they are interpreted by your legal counsel. Sometimes products are plain vanilla with a single sales option and are very straight-forward to produce. That situation is rare. More often than not there are multiple sales options with numerous variations based on the age of the fund; the type of investor it is aimed at ; and the fee structure.
Lets start with the data itself. If asset managers are calculating performance including best and worst returns, they need to be able to extract the return data from their system with series codes and effective dates with minimal effort. On the other end the vendor needs to ingest this data and push it to reporting documents. Better still, a system that provides an audit trail of the data for a given point in time could prove invaluable when data is restated. Data provenance-- who uploaded the file?; when did it change?: how many times did it change?-- are questions that need to be answered. Alternatively a solution that can calculate returns from NAVs and distributions may be preferable. Very few systems automate the calculation of best and worst returns which eliminate the need to manually calculate this fields.
Portfolio reporting is another aspect of Fund Fact reporting with its own requirements that differ from the portfolio reports that asset managers display on their websites each month. For example, a fund that invests more than half its assets in a secondary fund will need to display the top 10 holdings of that underlying fund as a separate matter.
Fund Facts (its all about the data)
Fund Fact Documents Require Data Expertise
The ability to respond to the myriad rules and variations requires data expertise and agility.
The biggest challenge to producing error-free Fund Fact documents in a timely manner resolves to data expertise-- the ability to make changes to data quickly, to have a system that can pick up those changes and automatically adjust the document output and the ability to override those rules when there are exceptions. Having worked on Fund Fact documents for more than a decade now, we understand the challenges that they present. The rules are prescribed by the regulators, but they are interpreted by your legal counsel. Sometimes products are plain vanilla with a single sales option and are very straight-forward to produce. That situation is rare. More often than not there are multiple sales options with numerous variations based on the age of the fund; the type of investor it is aimed at ; and the fee structure.
Lets start with the data itself. If asset managers are calculating performance including best and worst returns, they need to be able to extract the return data from their system with series codes and effective dates with minimal effort. On the other end the vendor needs to ingest this data and push it to reporting documents. Better still, a system that provides an audit trail of the data for a given point in time could prove invaluable when data is restated. Data provenance-- who uploaded the file?; when did it change?: how many times did it change?-- are questions that need to be answered. Alternatively a solution that can calculate returns from NAVs and distributions may be preferable. Very few systems automate the calculation of best and worst returns which eliminate the need to manually calculate this fields.
Portfolio reporting is another aspect of Fund Fact reporting with its own requirements that differ from the portfolio reports that asset managers display on their websites each month. For example, a fund that invests more than half its assets in a secondary fund will need to display the top 10 holdings of that underlying fund as a separate matter.
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